PART 7: Prepare Financial Statements
Prepare the financial statements for Smart Touch Learning for the month of December. Remember that the business started operations this month so all beginning balances were 0. For the Statement of Retained Earnings and the Balance Sheet, enter any decreases with a negative sign or parentheses.
SMART TOUCH LEARNING
Adjusted Trial Balance
December 31, 2016
Account Title
Debit
Credit
Cash
38,750
Accounts Receivable
1,600
Office Supplies
510
Prepaid Insurance
1,275
Furniture
10,800
Accumulated Depreciation - Furniture
400
Salaries Payable
3,200
Unearned Revenue
3,600
Common Stock
34,500
Dividends
3,100
Service Revenue
22,800
Salaries Expense
5,100
Depreciation Expense - Furniture
400
Insurance Expense
425
Utilities Expense
390
Rent Expense
2,100
Supplies Expense
50
Total
61,950
61,950
Smart Touch Learning
Income Statement
Month ended December 31, 2016
Revenues:
Service revenue
22,800
Expenses:
Salaries Expense
5,100
Rent Expense
2,100
Insurance Expense
425
Supplies Expense
50
Depreciation Expense - Furnit.
400
Utilities Expense
390
Total Expenses
8,465
Net Income
14,335
Smart Touch Learning
Statement of Retained Earnings
Month ended December 31, 2016
Retained Earnings, December 1, 2016
0
Net income for the month
14,335
14,335
Dividends
3,100
Retained Earnings, December 31, 2016
11,235
Smart Touch Learning
Balance Sheet
December 31, 2016
Assets
Liabilities
Cash
38,750
Salaries Payable
3,200
Accounts Receivable
1,600
Unearned Revenue
3,600
Office Supplies
510
Total Liabilities
6,800
Prepaid Insurance
1,275
Furniture
10,800
Less: Accumulated Depreciation
400
Net Furniture
10,400
Stockholders' Equity
Common Stock
34,500
Retained Earnings
11,235
Total Stockholders' Equity
45,735
Total Assets
52,535
Total Liabilities and Stockholders' Equity
52,535